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April 2019
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HMRC ' Structure and speed can achieve Strathie's vision

Lesley Strathie, Permanent Secretary at HMRC, responded to the recent review from the Cabinet Office with a spirited defence of her leadership team and the changes they have already made to improve processes and structures within the organisation.

Of course, it’s a fair recognition that the right efforts have been made by those who will further drive her vision going forward.

Staff within HMRC are well known for their tenacity and passion to do a great job. However, despite all the change that the organisation has undergone over the last few years, only 11% of staff feel that change has been well-managed and that this is ‘preventing the department from building a unifying culture which inspires pride and passion’.

The key to successful change is usually to be found in engaging key operational staff, then motivating them to drive the whole process forward quickly and effectively.

This in turn requires a clear view, not just of the strategic goals but also a comprehensively-thought-through model for the entire new organisation, which encompasses vision, strategic performance measures, organisational structures, new projects and business-as-usual activities, together with the right combination of skills, competencies and behaviours needed by all staff.

More important than any of these areas individually is the need to demonstrate clear alignment between all of them. Research shows that organisations that do not seek this rarely achieve their performance goals; whereas those that do, often achieve 200%+ of their targets. As Ms Strathie recognised in a recent article, top-down and bottom-up alignment are vital to the future success of the organisation.

If HMRC staff understand the organisation’s goals at strategic and operational level, they will also understand how their own job contributes to those goals, and they are likely to be well-motivated and strive even harder to achieve their own targets.

The Cabinet Office Review suggested that morale has been low and that at least one layer of management remains more likely to be focused on building the profile of their own area than looking out across the silos as a system that would benefit the Department as a whole. This is unlikely to change, however, until they feel that their advancement is clearly linked to HMRC’s overall success. Ms Strathie’s comments suggest that this will be one of the first areas to which she will turn her attention.

The answer for HMRC lies in governance, leadership and culture harnessing the passion and work ethic of the majority of staff and persuading those who currently see no need for change. The kind of detailed alignment model, mentioned earlier, is at the heart of such a programme but time to implement it fully is limited, given the proximity of the General Election which tends to change everyone’s priorities.

For HMRC, the challenges have never been greater nor the public scrutiny so intense. The Cabinet Office Review makes it clear that internal change is required: in Ms Strathie at least it seems they have found the right leader at the right time to meet those challenges.

Chris Mills is a Partner at PIPC, a global management consultancy.

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